Talk:Microsoft Corp v. At&T Corp., 550 U.S. 437 (2007)

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This case concerns the applicability of § 271(f) to computer software first sent from the United States to a foreign manufacturer on a master disk, or by electronic transmission, then copied by the foreign recipient for installation on computers made and sold abroad.

AT & T holds a patent on an apparatus for digitally encoding and compressing recorded speech. Microsoft's Windows operating system, it is conceded, has the potential to infringe AT & T's patent, because Windows incorporates software code *442 that, when installed, enables a computer to process speech in the manner claimed by that patent. It bears emphasis, however, that uninstalled Windows software does not infringe AT & T's patent any more than a computer standing alone does; instead, the patent is infringed only when a computer is loaded with Windows and is thereby rendered capable of performing as the patented speech processor. The question before us: Does Microsoft's liability extend to computers made in another country when loaded with Windows software copied**1751 abroad from a master disk or electronic transmission dispatched by Microsoft from the United States? Our answer is “No.”

The master disk or electronic transmission Microsoft sends from the United States is never installed on any of the foreign-made computers in question. Instead, copies made abroad are used for installation. Because Microsoft does not export from the United States the copies actually installed, it does not “suppl[y] ... from the United States” “components” of the relevant computers, and therefore is not liable under § 271(f) as currently written.

Plausible arguments can be made for and against extending § 271(f) to the conduct charged in this case as infringing AT & T's patent. Recognizing that § 271(f) is an exception to the general rule that our patent law does not apply extraterritorially, we resist giving the language in which Congress cast § 271(f) an expansive interpretation. Our decision leaves to Congress' informed judgment any adjustment of § 271(f) it deems necessary or proper.

III A This case poses two questions: First, when, or in what form, does software qualify as a “component” under § 271(f)? Second,**1754 were “components” of the foreign-made computers involved in this case “supplie[d]” by Microsoft “from the United States”? FN7

FN8. Microsoft and the United States stress that to count as a component, the copy of software must be expressed as “object code.” “Software in the form in which it is written and understood by humans is called ‘source code.’ To be functional, however, software must be converted (or ‘compiled’) into its machine-usable version,” a sequence of binary number instructions typed “object code.” Brief for United States as Amicus Curiae 4, n. 1; 71 USPQ 2d 1118, 1119, n. 5, 2004 WL 406640 (S.D.N.Y.2004) (recounting Microsoft's description of the software development process). It is stipulated that object code was on the master disks and electronic transmissions Microsoft dispatched from the United States.

FN9. On this view of “component,” the copies of Windows on the master disks and electronic transmissions that Microsoft sent from the United States could not themselves serve as a basis for liability, because those copies were not installed on the foreign manufacturers' computers. See § 271(f)(1) (encompassing only those components “combin[ed] ... outside of the United States in a manner that would infringe the patent if such combination occurred within the United States”).

The distinctions advanced by AT & T do not persuade us to characterize software, uncoupled from a medium, as a combinable component. Blueprints too, or any design information for that matter, can be independently developed, bought, *451 and sold. If the point of AT & T's argument is that we do not see blueprints lining stores' shelves, the same observation may be made about software in the abstract: What retailers **1756 sell, and consumers buy, are copies of software. Likewise, before software can be contained in and continuously performed by a computer, before it can be updated or deleted, an actual, physical copy of the software must be delivered by CD-ROM or some other means capable of interfacing with the computer.FN12

Because it is so easy to encode software's instructions onto a medium that can be read by a computer, AT & T intimates, that extra step should not play a decisive role under § 271(f). But the extra step is what renders the software a usable, combinable part of a computer; easy or not, the copy-producing step is essential. Moreover, many tools may be used easily and inexpensively to generate the parts of a device. A machine for making sprockets might be used by a manufacturer to produce tens of thousands of sprockets an hour. That does not make the machine a “component” of the tens of thousands of devices in which the sprockets are incorporated, at least not under any ordinary understanding of the term “component.” Congress, of course, might have included within § 271(f)'s compass, for example, not only combinable “components” of a patented invention, but also “information, instructions, or tools from which those components readily may be generated.” It did not. In sum, a *452 copy of Windows, not Windows in the abstract, qualifies as a “component” under § 271(f).FN13

Section 271(f) prohibits the supply of components “from the United States ... in such manner as to actively induce the combination of such components.” § 271(f)(1) (emphasis added). Under this formulation, the very components supplied from the United States, and not copies thereof, trigger § 271(f) liability when combined abroad to form the patented invention at issue. Here, as we have repeatedly noted, see supra, at 1750 - 1751, 1752 - 1753, the copies of Windows actually installed on the foreign computers were not themselves supplied from the United States.FN14 Indeed, those copies did not exist until they were generated by third parties outside the United States.FN15 Copying software abroad, all might agree, *454 is indeed easy and inexpensive. But the same could be said of other items: “Keys or machine parts might be copied from a master; chemical or biological substances might be created by reproduction; and paper products might be made by electronic copying and printing.” Brief for United States as Amicus Curiae 24. See also supra, at 1755 - 1756 (rejecting argument similarly based on ease of copying in construing “component”). Section 271(f) contains no instruction to gauge when duplication is easy and cheap enough to deem a copy in fact made abroad nevertheless “supplie[d] ... from the United States.” The absence of anything addressing copying in the statutory text weighs against a judicial determination that replication abroad of a master dispatched from the United States “supplies” the foreign-made copies from the United States within the intendment of § 271(f).FN16

AT & T alternately contends that the presumption holds no sway here given that § 271(f), by its terms, applies only to domestic conduct, i.e., to the supply of a patented invention's components “from the United States.” § 271(f)(1). AT & T's reading, however, “converts a single act of supply from the United States into a **1759 springboard for liability each time a copy of the software is subsequently made [abroad] and combined with computer hardware [abroad] for sale [abroad.]” Brief for United States as Amicus Curiae 29; see 414 F.3d, at 1373, 1375 (Rader, J., dissenting). In short, foreign law alone, not United States law, currently governs the manufacture and sale of components of patented inventions in foreign countries. If AT & T desires to prevent copying in foreign countries, its remedy today lies in obtaining and enforcing foreign patents. See Deepsouth, 406 U.S., at 531, 92 S.Ct. 1700. FN17

There is no dispute, we note again, that § 271(f) is inapplicable to the export of design tools-blueprints, schematics, templates, and prototypes-all of which may provide the information required to construct and combine overseas the components of inventions patented under United States law. See supra, at 1755 - 1756. We have no license to attribute to Congress an unstated intention to place the information Microsoft dispatched from the United States in a separate category.

Congress is doubtless aware of the ease with which software (and other electronic media) can be copied, and has not left the matter untouched. In 1998, Congress addressed “the ease with which pirates could copy and distribute a copyrightable work in digital form.” Universal City Studios, Inc. v. Corley, 273 F.3d 429, 435 (C.A.2 2001). The resulting measure, the Digital Millennium Copyright Act, 17 U.S.C. § 1201 et seq., “backed with legal sanctions the efforts of copyright owners to protect their works from piracy behind digital walls such as encryption codes or password protections.” Universal City Studios, 273 F.3d, at 435. If *459 the patent law is to be adjusted better “to account for the realities of software distribution,” 414 F.3d, at 1370, the alteration should be made after focused legislative consideration, and not by the Judiciary forecasting Congress' likely disposition.

Because no physical object originating in the United States was combined with these computers, there was no violation of § 271(f). Accordingly, it is irrelevant that the Windows software was not copied onto the foreign-made computers directly from the master disk or from an electronic transmission that originated in the United States. To be sure, if these computers could not run Windows without inserting and keeping a CD-ROM in the appropriate drive, then the CD-ROMs might be components of the computer. But that is not the case here.

Justice STEVENS, dissenting.

I disagree with the Court's suggestion that because software is analogous to an abstract set of instructions, it cannot be regarded as a “component” within the meaning of § 271(f). See ante, at 1754 - 1755. Whether attached or detached from any medium, software plainly satisfies the dictionary definition of that word. See ante, at 1755, n. 11 (observing that “ ‘[c]omponent’ is commonly defined as ‘a constituent part,’ ‘element,’ or ‘ingredient’ ”). And unlike a blueprint that merely instructs a user how to do something, software actually causes infringing conduct to occur. It is more like a roller that causes a player piano to produce sound than sheet music that tells a pianist what to do. Moreover, it is surely not “a staple article or commodity of commerce suitable for substantial noninfringing use” as that term is used in § 271(f)(2). On the contrary, its sole intended use is an infringing use.